Weekly Water Update - 27 Jan 2021
Inter-Valley arrangements continue to be the main focus for allocation markets through January which will continue into February following the announcement of Murrumbidgee’s delivery to be extended for another month at least. Coinciding with the Murrumbidgee deliveries into the lower Murray, Goulburn inter-valley trade will open in February further extending supply into the Lower Murray trading zone
The pressure from the supply side suggests prices will converge over time as these IVT deliveries continue, the larger unknown at this point is how much coverage will irrigators be thinking (ie demand) is required to build a position for next summer – which tool provides the best balance – carryover or forward water?
So far, Summer rainfall has been patchy with peak watering demand likely to run on for another 4-5 weeks before winding up, coupled with allocations hitting 100% in Murrumbidgee supply is now at peak in some areas which will continue to place downward pressure on allocation prices
Attention is slowly turning towards Carryover space, naturally opening offers for space have been $100+ for holders to accept allocation risk given current allocations
As a result of these supply side pressures, Allocation markets have been easing for the most part of January:
Murray River - $115-$125 – Inter-valley trades placing pressure on underlying prices, above and below choke considered at parity today
Goulburn - $115-$120 – Inter-valley trading will open in February so it is likely that price parity will remain
Murrumbidgee - $70 – buyer demand has fallen away after the last couple of weeks and could yet continue to drift lower in the coming week(s)
Forward water markets have traded at $185-$190 this last week with volume still available for sale
Top Opportunities – All Enquiries Welcome
Permanent markets buyer interest of note in the following zones:
Murrumbidgee General Security – offering $2,250 wet
Murray (above choke) General Security – offering $1600 wet
300ML Lower Murrumbidgee Zone 2 Groundwater DRY – $4,500
800ML Lower Murrumbidgee Zone 3 Groundwater DRY – $3,600
70ML Murrumbidgee High Security - $7,000 DRY
New Season Forward Allocation – Sep/Oct ’21 delivery - $195/ML – CALL TO DISCUSS
Murrumbidgee Carryover (Holders Risk) – offering $110/ML